57

Attainability of Net Zero Carbon Emission Targets in Nepal underDifferent Effort-sharing Approaches
Bijay B. PRADHAN1, Ram M. SHRESTHA2 and Bundit LIMMEECHOKCHAI1*
1
Sirindhorn International Institute of Technology, Thammasat University,
99 Moo 18, Km. 41 on Paholyothin Highway, Khlong Luang, Pathum Thani 12120, Tailand
2
Professor Emeritus, Asian Institute of Technology,
58 Moo 9, Km. 42 on Paholyothin Highway, Khlong Luang, Pathum Thani 12120, Tailand*E-mail: bundit@siit.tu.ac.th

Abstract
Nepal aims to achieve carbon neutrality by mid-century. This study aims to analyze the energy sectortransformation needed to achieve the carbon neutrality target. The study employs the AIM/Enduse model as amodelling tool to analyze the energy system. A business-as-usual (BAU) scenario is developed in which energy
and technological use follow historical trends. The carbon dioxide (CO2) emissions in the energy sector in BAU
would reach 66.3 MtCO2 in 2050. The study also assesses the carbon budget and carbon dioxide emission
allowance with various effort-sharing approaches. Based on the estimated emission allowances, the emission
pathway in the energy sector is determined to develop an emission reduction (ER) scenario. The ER scenario
also incorporates the Nationally Determined Contributions (NDC) targets of Nepal. In the ER scenario, CO2
emissions from the energy sector in Nepal peak in 2036, then drop, reaching 6.4 MtCO2 in 2050. The ER
scenario would require energy efficiency improvement and electrification of the end-use technologies in all thesectors; and fuel-switching from coal and oil to biomass in addition to electrification in thermal applications inindustries. The electricity consumption in the ER scenario would be higher by 70% compared to the BAU
scenario in 2050. Hydro, solar and biomass would have crucial roles in the decarbonization of the energy sector.
In the ER scenario, the combined power generation capacity of hydropower, solar and wind would reach 72
GW by 2050, which in the BAU scenario would be 37 GW. Policies and incentives that would promote theelectrification of end-use technologies and renewable power generation need to be formulated to achieve themitigations of the ER scenario.
Key words: AIM/Enduse, carbon neutrality, hydropower, Nepal, renewable energy

1. Introduction
Limiting the emissions of anthropogenic greenhousegases (GHG) emissions to keep the global averagetemperature below 2ºC and efforts to keep it below 1.5ºC
have been major concerns for the climate change
community. Studies show that the combined mitigation
efforts of countries’ currently pledging NDCs would not
be sufficient to meet the 2ºC and 1.5ºC targets. The
IPCC’s special report concludes that net carbon dioxide
emissions should reach zero by mid-century to keep thetemperature below 1.5°C above the pre-industrial level(IPCC, 2018). Researchers have tried to develop different
ways to share GHG emissions using equity principles tokeep the emissions below the limit. van den Berg et al.
Global Environmental Research
26/2022: 057−064
printed in Japan(2020) have presented various effort-sharing approaches
to estimating carbon budgets and emission allowances.
Nepal submitted its Long-term Strategy for Net-zero
Emissions (hereafter referred as ‘Nepal-LTS’) to theUnited Nations Framework Convention on Climate
Change (UNFCCC) in 2021 (GoN, 2021). The reportstates that Nepal can achieve carbon neutrality by 2045.
Achieving carbon neutrality in Nepal implies
decarbonization of the emitting sectors, mainly the energy
sector, as well as utilizing carbon sinks, to offset
emissions from hard-to-abate sectors. The Nepal-LTS also
shows that in the land-use, land-use change and forestry(LULUCF) sector, there would be net CO2 emissions in
the reference scenario. More than 40% of the land area of
Nepal is forested. Despite significant forest area coverage,©2022 AIRIES58

B. B. PRADHAN et al.

there are net emissions from the LULUCF sector due tohigh deforestation and timber harvesting (MoFE, 2021a).
The LULUCF sector plays a key role in offsetting theemissions to achieve carbon neutrality. The literature findsthat mitigation costs in the forestry sector range between$0.5 and $7 per tCO2 in developing countries, while forindustrialized nations the cost is in the range of $1.4 to$22 per tCO2 (Nabuurs et al., 2007). Nepal has abundant
renewable energy resources. The country has thetheoretical potential to generate 83 gigawatts (GW) andthe economic potential to generate 42 GW fromhydropower (WECS, 2010). The solar and wind energythat could be harnessed in Nepal are estimated to be 47.6
GW and 1.6 GW, respectively (Neupane et al., 2022).
Nepal aims to utilize the untapped renewable energy
resources within its borders to achieve its carbon
neutrality target.
There are several studies that have analyzed the GHG
implications of various energy and climate policies in
Nepal using long-term energy system models (Shakya &Shrestha, 2011; Shakya et al., 2012; Shrestha & Shakya,
2012; Pradhan et al., 2018; Pradhan et al., 2020). To theauthors’ knowledge, there are no studies that havequantified carbon budget and emission allowance
pathways using effort-sharing approaches for Nepal.
Therefore, this study estimates the carbon budget andemission allowance pathways with selected effort-sharing
approaches using the available methodologies. The study
then estimates the carbon sink potential in Nepal during
2020–2050. In addition, CO2 emissions during 2020–2050
from the industrial processes and product use (IPPU),
agriculture and waste sectors are estimated. Based on theemission allowances and CO2 emissions from thenon-energy sectors, the emission allowance in the energy
sector is estimated. The study then uses the AIM/Enduse
model to develop a business-as-usual (BAU) scenario andemission reduction (ER) scenario. The ER scenario isbased on estimated emission allowances in the energy
sector derived from the effort-sharing approaches. The ER
scenario considers the most challenging emission
allowance pathway as the emission limit during 2020–
2050. The emission reduction scenario assesses the energy
system transformation required in Nepal and emission
implications in various energy-using sectors. While mostof the earlier studies have focused on GHGs, this paper
focuses particularly on carbon dioxide emissions only.
This paper is organized as follows: Section 2 presents
the methodology used in this study. Section 3 presents theresults, which include estimation of carbon budget andemission allowances, and energy and CO2 emission
implications in a BAU scenario and an ER scenario.
Section 3 also discusses the primary energy consumption
and final energy consumption in the two scenarios in
addition to CO2 emissions from the energy sector. Section
4 summarizes the findings of the study and concludes thereport.

2. Methodology
2.1 Estimating Carbon Budget and CO2 Emission
Allowances“Carbon budget” indicates a finite number thatquantifies the allowable CO2 emissions during a given
time to keep the global temperature within a certain limit.
The carbon budget in this study is calculated following
van den Berg et al. (2020). The effort-sharing approaches
examined are: “grandfathering” (GF), “immediate percapita convergence” (IEPC), “per capita convergence”(PCC), “equal cumulative per capita emissions” (ECPC),“ability to pay” (AP) and “greenhouse development rights”(GDR). The equity principle used in these effort-sharing
approaches can be categorized into sovereignty, equality,
responsibility, capability and need or any combination of
two of these principles. These equity principles use
current emissions, population shares, per capita emissions,gross domestic product (GDP) per capita, historicalcumulative emissions and combinations of two of these
indicators for calculating carbon budget and emission
allowances. More details on underlying assumptions usedin the effort-sharing approaches such as equity principles,basic tenets and methodology can be found in van den
Berg et al. (2020). This study uses effort-sharing
approaches to estimate the CO2 emission allowanceinstead of greenhouse gases. The start year is assumed to
be 2018. For the GF approach, the emissions allowances
are assumed to be in proportion to the emissions of 2018.
2.2 Structure of the AIM/Enduse Model
The AIM/Enduse model is a bottom-up cost
optimization model where the total energy system cost to
meet the required energy service demand is minimized by
selecting a combination of technologies subjected to given
constraints such as energy limits, technologicalavailability, emission limits and others. The structure of
the AIM/Enduse Model is shown in Fig. 1. The energy
technology module of the model refers to devices thatconvert energy into the desired energy services. For
example, a cookstove is an energy technology thatconverts energy (biomass, LPG, electricity) into heat tomeet the heat demand associated with cooking as anenergy service category. Similarly, in the transport sector,
cars convert gasoline (energy) to meet the demand forpassenger transport as another kind of energy service. In
the case of the power sector, energy includes hydro, oil,coal, solar, etc., and energy technologies includehydropower plants, oil power plants, coal power plants,
solar PV and others. The energy service in the power
sector is electricity. Electricity is also an energy source forother sectors. Energy service demands are given
exogenously except for electricity generation in the caseof the power sector. Energy service demands are
estimated based on population, economic activities, etc.
For instance, households’ cooking service demand will

Attainability of Net Zero Carbon Emission Targets in Nepal

depend on the future population, passenger service
demand will depend on income, road networks, etc.
Technological details such as initial cost, operating andmaintenance (O&M) costs, lifetime, etc. are provided as
inputs to the model. Similarly, energy prices, emission
factors of each energy type, energy availability, etc. aregiven as inputs to the model. Based on the input data
provided, the AIM/Enduse model determines the
combination of energy technologies required to meet the
projected future service demands under a given set of
constraints at minimum system cost.
2.3 Nepal’s AIM/Enduse Model
Nepal’s AIM/Enduse model is the energy systemmodel of Nepal developed using the AIM/Enduse
modelling framework. It comprises six economic sectors:
the agriculture, commercial, power, industry, transportand residential sectors. The AIM/Enduse model has also
been used previously for energy and carbon policy
analysis in Nepal (Pradhan et al., 2018; Pradhan et al.,2019; Pradhan et al., 2020). Earlier studies analyzed theeffects of carbon prices and cooking electrification onenergy and GHG emissions. The residential sector has
been disaggregated into three physiographic regions(Mountains, Hills and Terai) and Kathmandu Valley.
These regions are further classified into urban and rural
areas. This categorization was done with an aim torepresent the differences in useful energy in cooking andheating, and also to ensure the suitability of technologicaloptions. For example, biogas options are most suitable in
the Terai region due to the favorable climatic conditions.
In the model, biogas has been modeled directly as theprimary energy source. Energy sources such as animal
dung and biodegradable wastes are not accounted for in
primary energy if they are used for biogas production, toavoid double counting. In this study, only carbon dioxide(CO2) emissions are analyzed. The CO2 emission factorsof different energy sources are based on the Third
National Communication of Nepal (MoFE, 2021b).
The main drivers of energy service demands are GDP

and population. Similar methods have been used in otherstudies in Nepal (Shrestha & Rajbhandari, 2010; Shakya& Shrestha, 2011; Shakya et al., 2012). The base year’s
energy prices in the model are based on import prices forcoal and oil. Prices of fuelwood are based on the Energy
Sector Synopsis Report of Nepal (WECS, 2010). In the
power sector, investment cost, service life and operating
and maintenance (O&M) costs of each power plant are
input exogenously to the model. It is assumed that theminimum share of storage hydropower plants will be 15%of the electricity generation mix by 2025 and will increase
to 30% by 2050. The model’s technology data wereobtained from different national sources (MinErgy, 2012;
NEEP/GIZ, 2012; Shrestha et al., 2018; Shrestha et al.,2021) as well as international sources (Kainuma et al.,
2003; IEA, 2014; IEA, 2017; IEA, 2020; IEA, 2021).

3. Results and Discussion
3.1 Carbon Budget and Emission Allowances
Figure 2 presents the carbon budget for Nepal during
2018–2100 estimated using various effort-sharing
approaches. The results show that the ECPC, AP and
GDR approaches allow a higher carbon budget to Nepal
due to its low emissions in the past and relatively lower
GDP in the future. The GF approach allocates the lowest
carbon budget during the period due to Nepal’s low shareof CO2 emissions in 2018. The IEPC approach allocatescarbon budgets based on population, whereas the PCC
approach considers population and present emissions,
therefore neither approach allocates a large carbon budget
to Nepal.
The CO2 emission allowances during 2020–2050
using various approaches are presented in Fig. 3. The
results show that the GF, IEPC and PCC approaches allow
higher emissions initially but require zero emissions to beapproached by 2050. In the case of the AP and GDR, theemission allowances would increase during 2020–2050.
The GDR approach allows higher emissions than the AP
during 2020–2050. The AP approach allows emissions

Fig. 2
Fig. 1

Structure of the AIM/Enduse model.

59

Carbon budget for Nepal during 2018–2100.

60

Fig. 3B. B. PRADHAN et al.

CO2 emission allowance for Nepal during 2020–2050.

Fig. 4

TPES in the BAU scenario during 2015–2050.

Fig. 5

FEC by fuel type in BAU during 2015–2050.

based on GDP per capita during the period whereas the
GDR considers both capability and responsibility. The
emission allowance in the GDR approach is based on the
Responsibility-Capacity Index (RCI), which incorporates
GDP per capita and income distribution measures.
3.2 Energy and Emissions in BAU
The study developed a BAU scenario which served
as a reference or baseline for comparison. The BAU
scenario assumes that the technological and energy use
pattern follows the historical trends as considered in otherstudies in the case of Nepal (Pradhan et al., 2018; Pradhan
et al., 2020).
3.2.1 Primary Energy Supply
Figure 4 presents the total primary energy supply(TPES) during 2015–2050 in the BAU scenario. The
TPES would grow from 12 Mtoe in 2015 to 17 Mtoe in
2030 and nearly 49 Mtoe in 2050. Biomass consumption
during 2015 and 2050 would grow by 67%. Petroleum
products in the TPES would surge from 1.2 Mtoe in 2015
to 12 Mtoe in 2050 and the use of coal would rise from
0.6 Mtoe in 2015 to 8 Mtoe in 2050. Hydro in the TPES
would grow at 11% on average during 2015–2050. In
2050, the hydro in the TPES would be 12 Mtoe. Biomass
would remain the dominant energy source in the TPES
during 2015–2050, but its share would fall from 81% in2015 to 32% in 2050. Hydro’s share would grow from 3%
in 2015 to 26% in 2050. Coal and petroleum products
would also have significant shares of 16% and 26% in
2050, respectively. Their shares in 2015 were 5% and
10% respectively. Imported electricity accounted for 1.3%of the TPES in 2015, but by 2050 Nepal would generateenough electricity to meet its own domestic demand. The
share of other renewables would be 1.0% in 2050, andwas very insignificant in 2015.
3.2.2 Final Energy Consumption
In the BAU scenario, final energy consumption(FEC) would reach 17 Mtoe in 2030; it would be 48 Mtoe

in 2050, which is four times higher than the FEC of 2015
(Fig. 5). Biomass would remain the dominant fuel,although its share in the final energy mix would dropfrom 82% in 2015 to 59% in 2030 and further to 32% in
2050. The shares of other fuels in the FEC in 2050 would
increase. There would be a significant increase in theshares of petroleum, coal and electricity. The share ofelectricity would increase from 3% in 2015 to 12% by
2030 and 24% by 2050. Similarly, in 2050, the shares ofcoal and petroleum products would be 16% and 26%,
respectively, as compared to 5% and 10%, respectively, in
2015. Biogas and other renewables (solar, wind) would
represent a tiny portion (1%) of the final energy mix in
2050.
3.2.3 CO2 Emissions
The CO2 emissions during 2015–2050 in the BAU
scenario are shown in Fig. 6. Total CO2 emissions would
increase from 6 MtCO2 in 2015 to 15 MtCO2 in 2030 and
66 MtCO2 in 2050. Biomass is considered carbon neutral(i.e., its consumption and production are assumed to takeplace in a sustainable manner), therefore, CO2 emitted
from biomass burning is not accounted for.
The trend of residential CO2 emissions would remainbroadly flat during 2015–2050; as such its share would

Attainability of Net Zero Carbon Emission Targets in Nepal

61

70
Agriculture

60

Power

MtCO₂

50
40

Industry

30

Transport

20

Commercial

10
Residential
02015 2020 2025 2030 2035 2040 2045 2050

Fig. 6

Fig. 7CO2 emissions in BAU and emission allowances in theenergy sector.

Fig. 8CO2 emission reduction by sector in the ER scenario.

CO2 emissions during 2015–2050 in BAU.

decrease from 6% in 2015 to 2% in 2050. The industry
and transport sectors were the first and second largest
emitters of CO2 in 2015 accounting for 16% and 11% of
the emissions, respectively. The commercial andagriculture sectors contributed around 6% of GHG
emissions in 2015. In 2050, the industrial sector would be
the highest CO2 emitter (45%) while the transport sector(41%) would stand second. The agriculture andcommercial sectors would account for 10% and 2%,
respectively, of the total CO2 emissions in 2050. The
share of the power sector in CO2 emissions would remain
negligible during 2015–2050.
3.3 Energy and Emissions in the ER Scenario
The emission reduction (ER) scenario is based on theemission allowances estimated as discussed in Section 3.1.
The emission reduction scenario first estimates the carbon
sequestration potential in Nepal during 2020–2050 fromthe LULUCF sector. Based on the estimation of CO2
emissions from the IPPU, agriculture and waste sectors,
as well as sequestration from the LULUCF sector, theemission allowances in the energy sector are estimatedsuch that the sum of the emissions and sequestration isequal to the emissions allowance estimated from theeffort-sharing approaches. The emission sequestrationfrom the LULUCF sector is based on the estimation in the‘with additional measures’ (WAM) scenario of the
Nepal-LTS submitted to the UNFCCC. The emission
allowances in the energy sector are used as the emission
limit in the ER scenario.
Figure 7 compares CO2 emissions in the energy
sector in the BAU scenario and the emissions allowancesin the energy sector as estimated by using effort-sharing
approaches. Emission allowances estimated from different
effort-sharing
approaches
arerepresented
byabbreviations. The emission allowances in AP and GDR,
i.e., EA_AP and EA_GDR do not comply with the carbon
neutrality target of Nepal; therefore, these emission
pathways will not be considered in the analysis. The
results show that Nepal’s energy sector emissions in BAU
would not exceed the emission allowances up to 2034 in

EA_GF and 2040 in EA_IEPC and EA_PCC. The
emission pathway in EA_GF is the most challenging
pathway in the case of Nepal; therefore, this study
considers the emission limit in 2035 to 2050 from EA_GF
for the ER scenario. In the ER scenario, the emission
reductions in 2040 and 2050 from the BAU levels wouldbe 60% and 90% in 2040 and 2050, respectively. In the
ER scenario, the NDC targets of Nepal are also
considered.
3.3.1 CO2 Emissions
Figure 8 presents the CO2 emission reduction in theenergy sector by sub-sector in the ER scenario comparedto the BAU scenario. The total CO2 emissions in the BAU
and ER scenarios are also presented in the figure.
Following the emission limit as discussed earlier, the total
CO2 emissions would peak in 2036 reaching 17 MtCO2
and then decline to 12.6 MtCO2 in 2040 and 6.5 MtCO2 in
2050. The transport sector would offer the largest
emission reduction up to 2038, whereas after 2038 theemission reduction would be the highest from the industry
sector. In 2040, the emission reductions from the BAUlevel in the industry and transport sectors would be 9.4
and 6.8 MtCO2, respectively. The emission reduction in
2040 from the residential, agriculture and commercial
sectors would be 1.5, 0.73 and 0.68 MtCO2, respectively.
In 2050, the emission reduction from the industry and62

B. B. PRADHAN et al.

Fig. 9PES in the ER scenario during 2015–2050.

transport sectors would be 26.9 and 24.2 MtCO2
respectively. Similarly, the emission reduction from theagriculture, residential and commercial sectors in 2050
would be 6.3, 1.5 and 1.0 MtCO2, respectively. The
cumulative CO2 reduction during 2015–2050 in theindustry, transport, agriculture, residential andcommercial sectors would be 206.1, 202.3, 38.6, 20.2 and13.0 MtCO2, respectively. The power sector would becompletely dependent on hydropower; therefore, there
would be no emission reduction from the power sector.
3.3.2 Primary Energy Supply
The primary energy supply (PES) in the ER scenario
is presented in Fig. 9. The PES would reach 15.5 Mtoe in
2030 and 37.4 Mtoe in 2050. The PES in the ER scenario
would be lower than the BAU level by 23.1%. This is dueto the high level of electrification combined with energy
efficiency improvement in the end-use technologies in the
ER scenario. Biomass would remain the dominant fuelduring the period, except in 2050, when hydro would
account for the highest share of the primary energy supply,
42.6%. The share of biomass would drop from 73.7% in2020 to 58.7% in 2030 and 40.5% in 2050. The share ofhydro would increase from less than 5% in 2030 to 16.6%
in 2030, 28.6% in 2040 and 42.6% in 2050. The share ofother renewables (mainly solar) would be 11.3% in 2050;
its share in 2040 would be only 0.5%. The use of coalwould gradually increase during 2015–2035, but after
2036 the consumption of coal would decline. The use ofcoal for thermal applications would be replaced byelectricity and biomass after 2035. Petroleum
consumption would peak in 2040, and then decline during
2040–2050. During 2040–2050, there would be a massive
increase in solar power. This is due to additional solar PV
capacity required to electrify the end-use technologies.
The hydropower capacity in 2050 would reach 47 GW.
Similarly, the solar PV and wind capacities in 2050 would
reach 23.5 GW and 1.5 GW, respectively. The total power
generation capacity in BAU in 2050 would be only 37
GW, whereas the total power generation capacity in the
ER scenario would be 72 GW.

Fig. 10 FEC by fuel type in the ER scenario during 2015–2050.

3.3.3 Final Energy Consumption
Final energy consumption during 2015–2050 in the
ER scenario is given in Fig. 10. Biomass will play a keyrole in the final energy mix during that period. The
consumption of biomass would remain flat during 2015–
2030, but the consumption would increase after 2030.
Biomass will have an important role in substituting forcoal and oil in thermal applications in industry. The
consumption of coal and petroleum products would
decline after 2035. Electricity would have a crucial role inthe decarbonization of the end-use sectors mainly in thetransport and industry sectors. Electric vehicles would
displace internal combustion (IC) engine vehicles in bothpassenger and freight transport. Hydrogen-based
technologies would not be cost competitive compared to
EV technologies in the transport sector. In the residential
and commercial sectors, electricity would replace LPG in
cooking and heating. The agriculture sector would rely
mainly on electricity and partially on solar energy forpumping. Electric tractors would replace diesel tractors in
the agriculture sector. In the industry sector, electricboilers and heat pump technologies would be used inprocess heating.

4. Conclusions and final remarks
This study used effort-sharing approaches from theexisting literature to determine the carbon budget andemission allowances for Nepal during 2020–2050. The
estimates show that “ability to pay” (AP) and “greenhousedevelopment rights” (GDR) would allow Nepal to emit
28.7 MtCO2 and 69.6 MtCO2, respectively in 2050. The
emission allowances of these two approaches are not inline with Nepal’s carbon neutrality target. In the otherthree approaches, i.e., “grandfathering” (GF), “immediate
per capita convergence” (IEPC), and “per capita
convergence” (PCC), carbon dioxide emissions would
converge to approximately zero by 2050. Based on theemission allowance, CO2 emissions that would be allowedfrom the energy sector were calculated using the CO2
emission estimates from the IPPU, agriculture, LULUCF

Attainability of Net Zero Carbon Emission Targets in Nepal

and waste sectors. This was used as a basis for anemission pathway in the energy sector for achievingcarbon neutrality and referred to as the emission reduction(ER) scenario. The AIM/Enduse model was used to assess
the energy and emissions implications in the BAU and ER
scenarios.
The CO2 emissions in the BAU scenario would reach
15.1 MtCO2 in 2030 and 66.3 MtCO2 in 2050. In the ER
scenario, the emissions in the energy sector would peak in
2036, reaching 17 MtCO2 and then drop continuously up
to 2050, reaching 6.5 MtCO2. The CO2 emissions fromthe energy and other sectors (IPPU, agriculture) would beoffset by carbon sequestration from the forestry sector.
Nepal-LTS reports that the CO2 sequestration potential in
Nepal in 2050 from the LULUCF sector would be 9.2
MtCO2. To achieve carbon neutrality by 2050,
renewable-based power generation would need to be
deployed on a massive scale. In BAU, the power
generation capacity would be 37 GW. In the ER scenario,
the capacity requirement would reach 72 GW. In addition,
biomass would also play a crucial role in meeting
industrial thermal energy demand. Electric vehicles would
have a major role in the decarbonization of the transport
sector. In the industry sector, electric boilers and industrial
heat pumps would be required to replace fossil-fuel based
boilers in process heating. The use of LPG cookstoves forcooking and heating would be replaced by electriccookstoves and heaters in the residential and commercial
sectors. However, decarbonization of the energy sector
would be a challenging task. Nepal already has plans andpolicies for promoting electric vehicles and electriccooking. However, achieving carbon neutrality meanselectrification of end-use technologies to the optimum
level. Reduction in the costs of solar PV technologies andbatteries would favor the electrification target, but proper
policies would need to be implemented to promoteelectricity-based technologies and phase out fossil-fuelbasedtechnologies. Electrificationof
cookingtechnologies and transport vehicles is already underway,
yet the electrification of other end-uses in industry as well
as agriculture, residential, and commercial sectors would
require appropriate policies as well as financial incentives.
In addition, the power grid and distribution network
would need to be upgraded to provide a reliable and stable
power supply. Furthermore, measures other than financial
support should be taken into consideration such as green
finance or climate finance options.
Biomass is carbon neutral if it can be harvested in asustainable way. Achieving carbon neutrality also implies
higher use of biomass energy. Therefore, policies that
promote sustainable harvesting of biomass will be crucial.
The forestry sector is not only a source of carbon neutralenergy, but also a carbon sink. The forestry sector plays
an important role in offsetting the carbon dioxide
emissions from hard-to-abate sectors, i.e., sectors inwhich the clean energy transition is not straightforward

63

due to lack of alternative technologies or highimplementation costs. The cost of carbon removal in theforestry sector lies in the range of $0.5 to $7 per tCO2 fordeveloping countries, so the forestry sector should also beprioritized for carbon dioxide mitigation. Carbon removal
through afforestation, forest restoration and forest
management must be implemented at an optimum level.
This study has focused on achieving carbon
neutrality by 2050 and analyzed only carbon dioxide
emissions in the energy sector. The study finds that carbon
neutrality is achievable with decarbonization of theenergy sector and carbon sequestration from the LULUCF
sector. However, IPCC states that “limiting warming to
1.5°C implies reaching net zero CO2 emissions globallyaround 2050 and concurrent deep reductions in emissionsof non-CO2 forcers, particularly methane.” Theagriculture sector is the major source of methane
emissions in Nepal. In terms of GHG emissions, Nepal
has higher GHG emissions from its agriculture sector thanfrom its energy sector. GHG mitigation in the agriculture
sector will be challenging as there are limited
technological and mitigation measures in the agriculture
sector. Also, non-CO2 emissions from biomass energy use
exceed the total carbon dioxide emissions from fossil-fuelburning in Nepal (MoSTE, 2014). The use of biomass canbe considered carbon neutral in CO2 terms, but non-CO2
emissions from biomass must not be ignored. Therefore,
efforts to reduce non-CO2 GHG emissions should also beprioritized in future research.
Acknowledgement
This study was supported by the Thammasat
Postdoctoral Fellowship. The authors would like to thankthe National Institute for Environmental Studies (NIES)
for their support of the AIM model and the Thammasat
University Research Unit in Sustainable Energy and Built
Environment for their support of data collection andanalyses.
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Bijay B. PRADHAN
Bijay B. Pradhan works as a postdoctoral
researcher at the Sirindhorn International Instituteof Technology, Thammasat University, Thailand.
He completed his Doctoral degree in theEngineering and Technology program of the same
institute. He holds a Master’s degree in Energy from the Asian Institute ofTechnology, Thailand and has completed a Bachelor’s degree in
Mechanical Engineering at Kathmandu University, Nepal. His major areasof research interests include climate change, energy modelling, energy
economics, energy policies, energy efficiency and renewable energy.

Ram M. SHRESTHA
Ram M. Shrestha is an emeritus professor at
the School of Environment, Resources andDevelopment (SERD), Asian Institute ofTechnology (AIT), Bangkok, Thailand and a former
chairman of the Academic Senate of AIT. He hasserved as a visiting professor at the Graduate
School for International Development andCooperation, Hiroshima University, Japan and the Institute of Engineering,
Tribhuvan University, Nepal. His areas of research are energy economics,
climate policy and energy-economic modeling. Professor Shrestha holds a
Doctor of Philosophy (Ph.D.) degree in Resource Economics and a
Master’s degree in Industrial Engineering and Management from the Asian
Institute of Technology. He graduated with a Bachelor’s degree inElectrical Engineering from the M.S. University of Baroda, India.

Bundit LIMMEECHOKCHAI
Bundit Limmeechokchai graduated from King
Mongkut's Institute of Technology, North Bangkok
with First Class Honours in MechanicalEngineering. From there, he received his Master’sand Doctoral degrees in Engineering from the
Asian Institute of Technology, Thailand. His
research expertise includes energy technologies; energy efficiency; energy
economics, planning and policy; modeling of energy and environment
systems; renewable energy; low-carbon technologies; demand-side
management; integrated resource planning; and CO2 mitigation.

(Received 9 April 2022, Accepted 4 October 2022)